29% Interest Rates? How Trust Deeds Destroy Stock Returns, Trust Deed Investor, be the bank.

There are three parties mentioned in a deed of trust document:

1. the beneficiary (private money lender, you),
2. the trustee (usually a neutral party, such as a title company),
3. the trustor (the borrower).

The trustee holds specific powers under a Trust Deed. If the borrower defaults, the trustee may initiate a streamlined foreclosure process called a trustee’s sale. This process is typically faster and less costly than judicial foreclosure. (Team, 2026) At the trustee’s sale, the property may be purchased by a third-party bidder or revert to the lender. Ownership is then transferred to either the beneficiary or the winning bidder.

Benefits of Deeds of Trust Investing: Deeds of Trust typically offer higher returns than traditional bank or savings accounts, with annual yields ranging from 8% to 18%. (Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns, 2026) Each investment is secured by real estate collateral at a favorable loan-to-value ratio, usually 70% or less, providing added security. (Team, 2025) Investors can begin with as little as $50,000. (BSTN Fund One: A Private Real Estate Investment Fund, 2026) Unlike stocks or mutual funds, Deeds of Trust provide predictable monthly payments, which are deposited directly into your account or sent by check. This investment is not a get-rich-quick scheme; it operates similarly to a CD, with your funds committed for a fixed term, such as 6 to 60 months, after which your principal is returned.

High-yield Deed of Trust investments are suitable for private individuals, non-profits, corporations, pension plans, retirement funds, 401(k)s, IRAs, and SEP accounts.

Currently, professional real estate investors acquire properties at foreclosure prices and resell them for profit. These investments generally offer favorable returns with relatively low risk. Compared to other options with similar risk profiles, the likelihood of loss in Deed of Trust investing is minimal. (Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns, 2026)

If a borrower defaults and foreclosure occurs, Deeds of Trust investments are protected by real estate collateral. The investor assumes title to the property and may sell it to recover the investment. As the lien holder, the investor’s position is secured by the property.

Why do people invest in Trust Deeds?

Monthly Cash Flow: Trust Deed investments provide monthly interest payments while protecting your principal. In a recent survey, over 96% of our investors cited consistent cash flow as their primary reason for investing. (CrowdStreet, 2021) If monthly payments are reinvested, even at moderate rates, returns can compound significantly beyond the base rate.

Security is another key benefit of Trust Deed investing. When you invest in a first Trust Deed, your funds are backed by a specific property. Investments are typically funded at 75% or less of the property’s current market value, offering equity protection. (Team, 2025)

Easy to Do. If you have ever borrowed money from a bank, you understand the basics of Trust Deed investing. As a Trust Deed investor, you have simply switched seats to the lending side of the table. You are the bank.

Diversification: Trust Deeds allow investors to diversify into real estate without the responsibilities of property management. The borrower manages the property, including repairs, maintenance, and tenant relations, while you receive monthly payments.

Lower Volatility: Investing in a first Trust Deed through a reputable broker with a strong repayment history is considered safe and low-stress. Compared to the stock market, Trust Deeds are significantly less volatile. (DEED vs SPY: Performance Charts & Full Comparison, 2026)

Guarantees: The property is secured by title insurance, property insurance, and a personal guarantee from the borrower.

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Level4funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493

References

Team, L. (2026). Judicial vs. Non-Judicial Foreclosure: Key Differences. LegalClarity. https://legalclarity.org/judicial-vs-non-judicial-foreclosure-key-differences/

(2026). Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns. KARPE. https://www.karpe.com/2026/02/03/trust-deed-investments-explained-how-investors-earn-10-13-secured-returns/

Team, L. (2025). How Trust Deed Investors Evaluate Risk and Return. LegalClarity. https://legalclarity.org/how-trust-deed-investors-evaluate-risk-and-return/

(2026). BSTN Fund One: A Private Real Estate Investment Fund. BSTN Fund One. https://bstnfund.com/one

(2026). Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns. KARPE. https://www.karpe.com/2026/02/03/trust-deed-investments-explained-how-investors-earn-10-13-secured-returns/

CrowdStreet. (January 27, 2021). CrowdStreet Unveils 2021 Investor Sentiment Survey Results and Investment Thesis. PR Newswire. https://www.prnewswire.com/news-releases/crowdstreet-unveils-2021-investor-sentiment-survey-results-and-investment-thesis-301216839.html

Team, L. (2025). How Trust Deed Investors Evaluate Risk and Return. LegalClarity. https://legalclarity.org/how-trust-deed-investors-evaluate-risk-and-return/

(2026). DEED vs SPY: Performance Charts & Full Comparison. PortfoliosLab. https://portfolioslab.com/tools/stock-comparison/DEED/SPY